It has been about a month since the last earnings report for Plexus (PLXS). Shares have added about 0.7% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Plexus due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Plexus' Q1 Earnings Beat Estimates
Plexus reported first-quarter fiscal 2026 adjusted earnings per share (EPS) of $1.78 compared with the year-ago quarter’s $1.73. The figure beat the Zacks Consensus Estimate of $1.77 per share. Management expected non-GAAP EPS to be in the band of $1.66-$1.81.
Revenues of $1.07 billion were up nearly 9.6% year over year but marginally missed the Zacks Consensus Estimate of $1.071 billion. Management expected revenues to be between $1.05 billion and $1.09 billion.
In the reported quarter, revenues from the Americas increased 25.9% to $345 million. Revenues from EMEA and Asia-Pacific increased 16.8% and 0.8%, respectively.
In the fiscal first quarter, Plexus announced 22 manufacturing program wins, which are estimated to contribute $283 million in annualized revenues once fully ramped into production.
Management highlighted that program wins, share gains and strengthening market demand position it for meeting/exceeding the high end of 9% to 12% revenue growth target for fiscal 2026.
Market Sector Details
Revenues from Aerospace/Defense were up 11.3% year over year and 3% quarter over quarter to $178 million. This segment contributed 17% to total revenues. Management guided for mid-single-digit sequential revenue growth for this sector. For the fiscal second quarter, the company expects growth (up mid-single digits) from program ramps and improving demand.
Healthcare/Life Sciences’ revenues were up 24.6% year over year and 10% quarter over quarter to $466 million. This contributed 43% to total revenues. Management expected the Healthcare Life Sciences sector’s revenues to grow in high single to low double digits sequentially. Management anticipates the current quarter revenues (flat to up low-single digits sequentially) to gain from strength in therapeutics.
Industrial sector’s revenues were down 3.6% year over year and 8% sequentially to $426 million. This segment contributed 40% to total revenues. Management expected the segment to register a high single-digit sequential revenue decrease in the fiscal first quarter. Management anticipates current-quarter revenues (up high-single to low-double digits sequentially) to be driven by market strength and program ramps in semicap and improving industrial equipment demand.
Our estimates for revenues from the Industrial, Healthcare/Life Sciences and Aerospace/Defense were $426.5 million, $462.2 million and $182.2 million, respectively.
The company’s top 10 customers accounted for 52% of net revenues in the fiscal first quarter.
Operating Details
Gross profit on a GAAP basis increased 5.4% year over year to $106.2 million. Gross margin was 9.9%, down from 10.3% reported in the year-ago quarter.
Selling and administrative expenses increased 5.1% from the year-ago quarter’s actuals to $51.7 million.
Adjusted operating margin contracted 20 basis points to 5.8%.
Cash Flow & Balance Sheet Position
As of Jan. 3, 2026, Plexus had cash & cash equivalents worth $248.8 million compared with $306.5 million as of Sept. 27, 2025.
It had long-term debt and finance lease obligations, net of the current portion of $91.1 million as of Jan. 3, 2026, compared with $91.9 million as of Sept 27, 2025.
For the quarter under review, cash flows used in operations were $15.4 million. Plexus reported a negative free cash flow of $50.6 million after incurring capital expenditures of $35.2 million.
The company repurchased $22.4 million worth of shares at an average price of $146.36 per share under its repurchase program. Out of the $100 million authorization, $62.6 million remains available.
Q2 Outlook
For the second-quarter fiscal 2026, revenues are anticipated to be between $1.11 billion and $1.15 billion.
Non-GAAP operating margin is expected to be between 5.6% and 6%. Non-GAAP EPS is expected to be in the band of $1.80-$1.95.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in fresh estimates.
The consensus estimate has shifted 13.19% due to these changes.
VGM Scores
Currently, Plexus has a average Growth Score of C, a score with the same score on the momentum front. Following the exact same course, the stock has a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Plexus has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Plexus Corp. (PLXS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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